DocuSign, best known for its digital signature business, is releasing new tools that focus on the entire process of drawing up and completing agreements.
It’s part of a broader effort by the company to expand beyond its core offering of e-signatures, in the face of growing competition in that space from Adobe and other rivals. Going forward, DocuSign wants to convince customers it is more than just an e-signature company, a move that opens up new fronts of competition against global companies like Oracle as well as Pacific Northwest startups like Icertis, all while attempting to get on a path of long-term profitability.
The three new tools are part of an ongoing evolution to owning what the company calls the “agreement cloud.” By providing tools to not only sign documents but create and manage them, DocuSign believes it will double its market opportunity, CEO Dan Springer said in an interview with GeekWire.
“E-signature was the first step to unlocking the modernization and automation of (customers’) system of agreement,” Springer said. “But now we are coming to what feels like the natural fruition of the start of that journey by saying we have a full agreement cloud solution. You can go back through your entire system as a customer and modernize that and automate that process and get rid of the paper and get rid of the manual processes to allow you to have a much more cost efficient and effective system that’s also a lot friendlier for the environment.”
DocuSign originally started in Seattle and later relocated its headquarters to the San Francisco Bay Area, though more than a third of the company’s 3,100 employees remain in its original hometown. With 1,074 employees and contractors, the Seattle office is DocuSign’s largest, followed by San Francisco with about 900 people.
Here is a look at the new tools, which will debut in DocuSign’s ’19 Release:
- DocuSign Gen for Salesforce, available on Salesforce AppExchange, lets sales reps and other users automatically generate signature-ready contracts within Salesforce with a few clicks.
- DocuSign ID Verification digitizes and automates verifying government identification in sensitive transactions, like opening a bank account, which would normally require someone to present a physical ID.
In addition to these new tools, DocuSign continues to invest in document creation and storage through the integration of SpringCM, the Chicago-based company that DocuSign acquired for $220 million last year.
Springer compared DocuSign’s evolution to when Salesforce branched out beyond sales to focus on broader services approximately a decade ago. He downplayed competition in the company’s new realm, arguing that no one else is providing services to shake up the entire agreement process, and instead said the biggest challenge is getting customers to recognize that DocuSign is not just a signature company.
DocuSign pegged the value of its original market of e-signatures at roughly $25 billion. But the market opportunity in the full system of agreement is twice as large, at $50 billion, the company says.
DocuSign, which was the long-time leader on the GeekWire 200 list of the top Pacific Northwest startups, went public last April. Its stock shot up 30 percent out of the gate, with investors showing serious appetite for the enterprise software company. The stock has since climbed 43 percent, rising faster than the Nasdaq Stock Exchange it is listed on, though it is down 5.7 percent today.
DocuSign’s surge on the public markets is part of an interesting trend of unprofitable growth companies faring much better among investors than companies that focus more on profits. DocuSign did eek out a small non-GAAP profit for the first time last year, though it has traditionally prioritized growth over profit.
Springer expects DocuSign to post operating profits of about 20 to 25 percent in three to five years, up from the 5 percent profits projected for this year. Springer thinks the company’s focus on growth and scale will ramp up profits in the coming years.
“If we find choices and tradeoffs, we are growth company, so we will make the investments in growth and not have the increased profitability come as fast,” said Springer. “But at this current point we believe we’ll be doing both, keeping the high growth point and improving profitability.”
DocuSign capped its first year as a public company by besting analyst expectations for revenue and profits in the fourth quarter. For the full year, DocuSign posted $701 million in revenue, up 35 percent over year-over-year. This year, the company expects revenue of $910 million to $915 million, which would represent 29.8 to 30.5 percent growth over last year. DocuSign finished the year with 477,000 customers.
Infrastructure remains one of DocuSign’s largest costs as it delves further into the “agreement cloud.” Rather than working with a public cloud provider like Amazon or Microsoft, DocuSign has its own “rings” of data centers, with three a piece in the U.S. and Europe.
Springer says DocuSign has very high standards for redundancy and making sure its systems are always running smoothly. He gave an example of a customer using its e-signature services, T-Mobile, to show the importance of reliability and why it runs its own data centers.
“Whether you go into a store, whether you call into a call center, whether you go onto the website, every route you go it goes through DocuSign,” Springer said. “So if we were down, they are down for business.”